Notes to the Financial Statements

For The Year Ended 31 December 2022

1. CORPORATE INFORMATION

The financial report of the Company for the year ended 31 December 2022 was authorised for issue in accordance with a resolution of Directors on 27 April 2023.

The Company is a proprietary limited company incorporated in Australia. The ultimate parent of the Company is Melbourne Symphony Orchestra Holdings Limited (MSOHL).

MSOHL is a public company limited by guarantee and was incorporated in Australia on 19 October 2006 and subsequently purchased all shares in the Company from the Australian Broadcasting Corporation (ABC) for $10.

The nature of the operations and principal activities of the Company are described in the Directors’ Report.

2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Australian Charities and Not for Profits Commission Act 2012, Australian Accounting Standards – Simplified Disclosures, and other authoritative pronouncements of the Australian Accounting Standards Board.

These accounting policies have been consistently applied by the Company and, except where there has been a change in accounting policy, are consistent with those of the previous period.

The financial report is presented in Australian dollars.

Going Concern

The financial report has been prepared on a going concern basis which assumes the Company will be able to pay its debts as and when they become payable for a period of at least 12 months from the date of the financial report.

As disclosed in Note 23, The Company is economically dependent on the ongoing annual funding from the Australian and Victorian Governments through a multipartite agreement.

The financial statements have been prepared based upon conditions existing at 31 December 2022. Having carefully assessed the current forecasts, taking into consideration the third year into an existing 4-year funding framework for the Company as an approved Partner organisation, the Directors have determined that the going concern basis remains appropriate for the preparation of these financial statements.

b) Statement of compliance

The Company has adopted AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities for the financial year beginning 1 January 2021.

The Company is a not-for-profit, private sector entity which is not publicly accountable under Australian Accounting Standards. Therefore, the financial statements for the Company are tier 2 general purpose financial statements which have been prepared in accordance with Australian Accounting Standards – Simplified Disclosures (AASB – SD) (Including Australian interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Australian Charities and Not for Profits Commission Act 2012. Other than the change in disclosure requirements, the adoption of AASB 1060 has had no significant impact on the entity’s financial statements because the entity’s previous financial statements complied with Australian Accounting Standards – Reduced Disclosure Requirements.

Notes To The Financial Statements For The Year Ended 31 December 2022

2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

c) Revenue recognition

Revenues are recognised when an entity satisfies a performance obligation by transferring a promised good or service to a customer. AASB 1058 establishes principles for not-for-profit entities to recognise income on transactions where the consideration to acquire an asset is significantly less than fair value principally to enable a NFP to further its objectives. The excess of the asset recognised over any “related amounts” is recognised as income immediately. The Company has not entered into any transactions where the consideration to acquire an asset is significantly less than the fair value of the asset principally to enable the Company to further its objectives.

Ticket sales

Ticket sales are recognised at the time of concert performance. The value of tickets sold in advance of each concert is recorded as prepaid ticket sales and recognised as a liability.

Sponsorship revenue

Sponsorship revenue is recognised in the period to which the sponsorships relate. Sponsorships which relate to specific performances are recognised at the time of concert performance. Sponsorship revenue is traditionally paid in advance and the value of unearned sponsorship revenue is recognised as a liability.

Government funding revenue

Funding revenue comprises funding from the Federal Government, the State Government of Victoria and local governments.

The current tripartite funding agreement between MSOHL, the Australia Council for the Arts through the Major Performing Arts Board, and the Victorian Ministry for Creative Industries, through Creative Victoria, is for a period of four years ending 31 December 2024.

Funding revenue is recognised when due under the terms of the funding agreement. Special purpose funding, which requires the Company to fulfil an obligation outside its normal operations, is recognised at the time the obligation is fulfilled.

Government grants

Grants from the government are recognised in the period to which the grants relate. Grants which relate to specific activities/performances are recognised at the time of activities/concert performance.

Interest revenue

Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial assets.

Sale of financial assets

Gain/(loss) on fair value of financial assets is recognised when receivable. Dividends are recognised when the right to payment is established.

Sale of non-current assets

The gross proceeds of non-current asset sales are included as revenue at the date control of the asset passes to the buyer, usually when an unconditional contract of sale is signed.

The surplus or deficit on disposal is calculated as the difference between the carrying amount of the asset at the time of disposal and the net proceeds on disposal.

Donations, bequests and grants

Donations collected, including cash and goods for resale, are recognised as revenue upon attaining control over the donation and any performance obligations relating to the donation are completed.